Among technical analysts, there’s a saying that markets take the escalator up and the elevator down. The idea is that when the market rallies, it tends to slowly and steadily march higher. Meanwhile, when it sells off, it tends to do so in a rapid fashion. 📈📉
Fortunately (or unfortunately), the market has given us a recent example of this in practice.
The chart below shows that it took about two months for the S&P 500 to rally 20% off its June lows, but only three weeks to give about 60% of those gains back. And if you’ve been trading the last few weeks, you know it’s been rough. 💩
So as we head into a three-day weekend, this is a good reminder that the market remains in a challenging environment. The traditional 60% stock and 40% bond portfolio is having its worst year in decades, and bonds have officially entered their first bear market in 30 years. 🐻
Whether you’re at the beach or the computer this weekend, be sure to recharge and check in with your process to see how you can finish the year strong. Just because it started badly doesn’t mean it has to end that way. 👍
And also, make sure you take some time for yourself. It is Labor Day, after all, and the markets will be there when you get back… 🍻